I believe Mike insures the hull for 900k (approximately his cost) and 1 million smooth liability. His premium is what it should be for these limits. I think underinsuring the hull (as the current value is likely 2x cost) is a mistake but that can fill it's own thread.

Yeah, but neither will 3mm or 5mm.

Depends on your net worth.

They'll also be suing Textron / Pratt / Williams, all of which have bigger pockets.

My insurance is $900K hull (what I have invested, with the Garmin upgrade). My plane is easily worth double that now and I may increase the hull coverage, but I do expect the hull value will decline in coming years as the price bubble deflates some.

My liability is $1M/$100K sublimit. Minimal, effectively near zero.

The reality is that you cannot get or afford liability limits commensurate with the risk. That is an unbounded number. If you crash into a kindergarten with a judgment of $50M against you, it won't matter whether you have $1M, $2M, $5M,, or even $10M insurance. You are going to be wiped out because the settlement exceeds the insurance and your net worth. I think the folks flying with $2M or $5M liability thinking they are well covered are fooling themselves.

Another factor is the exposure in a jet is very low. They just do not crash very often. Jets are the safest planes flying. If you stay current, keep the plane well maintained, and don't do stupid stuff, you eliminate at least 90% of the accidents that do occur.

The $1M/$100K liability limit opened up underwriters who would no write higher liability limits. It seems the market is not constrained too much on hull value but seemingly very tight on liability limits.

The $100K seat sublimit approaches $1M pretty fast when you have 9 seats and they are occupied more than I thought they would be. Family and employees occupy them mostly, so that limits some liability as well.

I view the $1M liability mostly for the potential damage I might cause on the ramp to other aircraft. It's totally inadequate for any personal injury situation. To have any real sense of liability coverage, I'd need at least $10M, and that's just not available.

Mike C.

And dedicated legal teams, making it much harder to win.

The pilot, owner, operator are always the easiest targets for those injured.

The plane, engine folks are who the pilot's families sue.

Mike C.

Mike’s strategy isn’t unreasonable. If he is the primary PIC and it should all go down, he probably won’t be around to deal with the liability. If his estate is setup right, lawyers won’t be able to get access to much of the remaining assets.

The money saved is probably better spent on: training, having a SIC and/or better maintenance/system upgrades, instead of feeding insurance.

Which brings us back around to the M3. Based on the insurance discussion alone, why would Cessna bring out a product, that may be cost prohibitive to own as an owner single pilot? It appears there is an $ inflection point where it doesn’t become practical to run an owner pilot aircraft. The M2 looks like it’s about at that limit to be practical?

Not really, all M2's are over $3M so they're in the 2nd stage of insurance difficulty for owner flown operations. Assuming the M3 would be $7M, it's certainly in the 3rd stage but much better than the CJ3+ and CJ4.

We've talked about the reasons that Textron wouldn't build an M3, here's a counter-point, the M3 would easily sell for $1M more than the M2... I doubt it would cost Textron $250k more to build it.

Not really, all M2's are over $3M so they're in the 2nd stage of insurance difficulty for owner flown operations. Assuming the M3 would be $7M, it's certainly in the 3rd stage but much better than the CJ3+ and CJ4.

We've talked about the reasons that Textron wouldn't build an M3, here's a counter-point, the M3 would easily sell for $1M more than the M2... I doubt it would cost Textron $250k more to build it.

Define cost. Does that include engineering and certification? If so, over what amortization schedule?

If not, what would these up-front expenses be, and how many airframes would be required to amortize them to profitability?

-J

I'm still confused why they haven't replaced the Proline in the CJ4 with Garmin. Maybe those are mostly pro crews and the owners don't care.

Patience Grasshopper!

He's got plenty of turbine time, in his 30's, it's not the pilot qual, it's the value of the airplane combined with him being the owner. I think it only dropped to $150k for his pro pilot to fly it SP, I'm not sure if that's just what it is or if that price factored in the fact that the owner is a pilot.

He ended up going pro crew.[/quote]
This client of yours from Louisiana?

Spend $10M on a plane and you don't even get to fly it.

I'm sure glad I don't have one of those nice new planes that owners aren't able to fly themselves.

Mike C.

Spend $10M on a plane and you don't even get to fly it.

I'm sure glad I don't have one of those nice new planes that owners aren't able to fly themselves.

Mike C.

Confused; if the vast majority of jets at this level are pro flown/dual flown, what is the impetus for a M3? It will be a $8mm jet that will have expensive insurance requirements for owner SP. Seems to me that the M2 is at about the economical limit of a new personal jet.